(a) The maximum rate of finance charges on or in connection
with any subordinate mortgage loan may not exceed eighteen percent
per year on the unpaid balance of the amount financed.

(b) A borrower shall have the right to prepay his or her debt,
in whole or in part, at any time and shall receive a rebate for any
unearned finance charge, exclusive of any points, investigation
fees and loan origination fees, which rebate shall be computed
under the actuarial method.

(c) Except as provided by section one hundred nine, article
three, chapter forty-six-a of this code and by subsection (g) of
this section, no additional charges may be made, nor may any charge
permitted by this section be assessed unless the loan is made:
Provided, That in the event the loan is not made, the licensee is
not required to refund an appraisal fee that is collected from a
loan applicant by the licensee and paid to an unrelated third-party
appraiser unless the fee is required to be refunded pursuant to
federal law.

(d) Where loan origination fees, investigation fees or points
have been charged by the licensee, the charges may not be imposed
again in any refinancing of that loan or any additional loan on
that property made within twenty-four months thereof, unless the
new loan has a reasonable, tangible net benefit to the borrower
considering all of the circumstances, including the terms of both
the new and the refinanced loans, the cost of the new loan and the
borrower’s circumstances. The licensee shall document this benefit
in writing on a form prescribed by the commissioner and maintain
suchthe documentation in the loan file. To the extent this
subdivision overrides the preemption on limiting points and other
charges on first lien residential mortgage loans contained in the
United States Depository Institutions Deregulation and Monetary
Control Act of 1980, 12 U. S. C. §1735f-7a, the state law
limitations contained in this section shall apply.

(e) Notwithstanding other provisions of this section, a
delinquent charge or late charge may be charged on any installment
made ten or more days after the regularly scheduled due date in
accordance with section one hundred twelve or one hundred thirteen,
article three, chapter forty-six-a of this code, whichever is
applicable. The charge may be made only once on any one
installment during the term of the primary or subordinate mortgage
loan.

(f) Hazard insurance may be required by the lender. The
charges for any insurance shall not exceed the standard rate
approved by the Insurance Commissioner for the insurance. Proof of
all insurance in connection with primary and subordinate mortgage
loans subject to this article shall be furnished to the borrower
within thirty days from and after the date of application therefor
by the borrower.

(g) Except for fees for services provided by unrelated third
parties for appraisals, inspections, title searches and credit
reports, no application fee may be allowed whether or not the
mortgage loan is consummated; however, the borrower may be required
to reimburse the licensee for actual expenses incurred by the
licensee in a purchase money transaction after acceptance and
approval of a mortgage loan proposal made in accordance with the
provisions of this article which is not consummated because of:

(1) The borrower's willful failure to close the loan; or (2) The borrower's false or fraudulent representation of a
material fact which prevents closing of the loan as proposed.(h) No licensee shall make, offer to make, accept or offer to
accept any primary or subordinate mortgage loan except on the terms
and conditions authorized in this article.

(i) No licensee shall induce or permit any borrower to become
obligated to the licensee under this article, directly or
contingently, or both, under more than one subordinate mortgage
loan at the same time for the purpose or with the result of
obtaining greater charges than would otherwise be permitted under
the provisions of this article.

(2) Any provision whereby the borrower waives any rights
accruing to him or her under the provisions of this article;

(3) Any requirement that more than one installment be payable
in any one installment period, or that the amount of any
installment be greater or less than that of any other installment,
except for the final installment which may be in a lesser amount,
or unless the loan is structured as a revolving line of credit
having no set final payment date;

(4) Any assignment of or order for the payment of any salary,
wages, commissions or other compensation for services, or any part
thereof, earned or to be earned;

(5) A requirement for compulsory arbitration which does not
comply with federal law; or

(6) Blank or blanks to be filled in after the consummation of
the loan. A borrower must be given a copy of every signed document
executed by the borrower at the time of closing.

(k) No licensee shall charge a borrower or receive from a
borrower money or other valuable consideration as compensation
before completing performance of all services the licensee has
agreed to perform for the borrower unless the licensee also
registers and complies with all requirements set forth for credit
service organizations in article six-c, chapter forty-six-a of this
code, including all additional bonding requirements as may be
established therein.

(l) No licensee shall make or broker revolving loans secured
by a primary or subordinate mortgage lien for the retail purchase
of consumer goods and services by use of a lender credit card.

(m) In making any primary or subordinate mortgage loan, no
licensee may, and no primary or subordinate mortgage lending
transaction may, contain terms which:

(1) Collect a fee not disclosed to the borrower; collect any
attorney fee at closing in excess of the fee that has been or will
be remitted to the attorney; collect a fee for a product or service
where the product or service is not actually provided; misrepresent
the amount charged by or paid to a third party for a product or
service; or collect duplicate fee or points to act as both broker
and lender for the same mortgage loan, however, fees and points may
be divided between the broker and the lender as they agree, but may
not exceed the total charges otherwise permitted under this
article: Provided, That the fact of any fee, point or compensation
is disclosed to the borrower consistent with the solicitation
representation made to the borrower;

(2) Compensate, whether directly or indirectly, coerce or
intimidate an appraiser for the purpose of influencing the
independent judgment of the appraiser with respect to the value of
real estate that is to be covered by a deed of trust or is being
offered as security according to an application for a primary or
subordinate mortgage loan;

(3) Make or assist in making any primary or subordinate
mortgage loan with the intent that the loan will not be repaid and
that the lender will obtain title to the property through
foreclosure: Provided, That this subdivision shall not apply to
reverse mortgages obtained under the provisions of article
twenty-four, chapter forty-seven of this code;

(4) Require the borrower to pay, in addition to any periodic
interest, combined fees, compensation or points of any kind to the
lender and broker to arrange, originate, evaluate, maintain or
service a loan secured by any encumbrance on residential property
that exceed, in the aggregate, six percent of the loan amount
financed, including any yield spread premium paid by the lender to
the broker: Provided, That reasonable closing costs, as defined in
section one hundred two, article one, chapter forty-six-a of this
code, payable to unrelated third parties may not be included within
this limitation: Provided, however, That no yield spread premium
is permitted for any loan for which the annual percentage rate
exceeds eighteen percent per year on the unpaid balance of the
amount financed: Provided further, That if no yield spread premium
is charged, the aggregate of fees, compensation or points can be no
greater than five percent of the loan amount financed. The
financing of the fees and points are permissible and, where
included as part of the finance charge, does not constitute
charging interest on interest. To the extent that this section
overrides the preemption on limiting points and other charges on
first lien residential mortgage loans contained in the United
States Depository Institutions Deregulation and Monetary Control
Act of 1980, 12 U. S. C. §1735f-7a, the state law limitations
contained in this section appliesapply;

(5) Secure a primary or subordinate mortgage loan by any
security interest in personal property unless the personal property
is affixed to the residential dwelling or real estate;

(6) Allow or require a primary or subordinate mortgage loan to
be accelerated because of a decrease in the market value of the
residential dwelling that is securing the loan;

(7) Require terms of repayment which do not result in
continuous monthly reduction of the original principal amount of
the loan: Provided, That the provisions of this subdivision may
not apply to reverse mortgage loans obtained under article
twenty-four, chapter forty-seven of this code, home equity,
open-end lines of credit, bridge loans used in connection with the
purchase or construction of a new residential dwelling or
commercial loans for multiple residential purchases;

(8) Secure a primary or subordinate mortgage loan in a
principal amount that, when added to the aggregate total of the
outstanding principal balances of all other primary or subordinate
mortgage loans secured by the same property, exceeds the fair
market value of the property on the date that the latest mortgage
loan is made. For purposes of this paragraph, a broker or lender
may rely upon a bona fide written appraisal of the property made by
an independent third-party appraiser, duly licensed or certified by
the West Virginia Real Estate Appraiser Licensing and Certification
Board and prepared in compliance with the uniform standards of
professional appraisal practice: Provided, That commencing January
1, 2012, and continuing until January 1, 2015, this prohibition
does not apply to any mortgage modification loan made in
participation with and in compliance with the federal Homes
Affordable Modification Program, a part of the federal Making Home
Affordable program, or any other mortgage modification loan funded
through any other federal or state program or litigation
settlement;

(9) Advise or recommend that the consumer not make timely
payments on an existing loan preceding loan closure of a
refinancing transaction; or

(10) Knowingly violate any provision of any other applicable
state or federal law regulating primary or subordinate mortgage
loans, including, without limitation, chapter forty-six-a of this
code.

_______________

(NOTE: The purpose of this bill is to provide an exception to
current mortgage loan limitations to permit participation in a
federal program providing home mortgage relief under certain
circumstances. Under the program, a modification loan may exceed
the fair market value of the property at the time of the loan.

Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that would
be added.)